Bitcoin’s rise might be linked to price manipulation, study indicates

The rise of cryptocurrency prices last year, including bitcoin, ethereum, and altcoins, could have been largely caused by price manipulation, according to a paper published today by researchers at the University of Texas at Austin. The paper, co-authored by a finance professor who is known for catching fraud in financial markets, reveals several distinct patterns in trading that suggest several people or a person at the major cryptocurrency exchange Bitfinex inflated virtual coin prices.

The 66-page report states that Bitfinex might have used the virtual coin Tether, which it owns, to generate fake demand for bitcoin by buying up the virtual currency and keeping its price up while it sank at other exchanges. The paper found that the more…